Trelleborg doubles oil/gas sector business with CRP buy

By Liz White, ERJ staff

Trelleborg, Sweden-Trelleborg is to acquire UK-based engineering CRP Group for about SKr970 million ($122.3 million). Skelmersdale, Lancashire-headquartered CRP is a supplier of polymeric parts-many of them made of polyurethane-for the subsea oil and gas industry. It has annual sales of slightly more than SKr1000 million and 500 employees, primarily in the UK and the US.

The deal will make Trelleborg's Engineered Systems business "a global market leader in polymer systems and solutions for offshore oil and gas projects," said a Trelleborg statement. Trelleborg's annual sales in oil- and gas-related operations will double-to 7 to 8 percent of total group turnover, or about SKr 1600 to1800 million-from the current 3 to 4 percent this business currently generates, indicated a spokeswoman for the major Swedish rubber group.

"With CRP, we will be gaining a significant foothold in one of our prioritised growth segments, which we view as highly attractive for the future," said Peter Nilsson, Trelleborg's ceo, in the company statement. "We have been following CRP for some time," he admitted, expressing the group's delight in taking over such a "global leader and its extensive technological and market expertise."

Adding CRP moves the Swedish group into more profitable segments, the Trelleborg chief continued. CRP largely supplies systems for the subsea sector of the oil and gas business, an area that Trelleborg expects, "to grow considerably faster than the oil and gas market in general."

Trelleborg's spokeswoman said CRP is strong in the oil exploration, drilling and production phases, while Trelleborg has largely been focused on the production phase. Some products and systems of the two businesses are therefore complementary: other CRP products will expand Treleborg's range, she said.

CRP makes products for seismic surveys, drilling operations and subsea production, with solutions for deepwater flow assurance and buoyancy systems, as well as many specialised engineered polymer-based solutions, Trelleborg added.

The deal should be concluded in January, with Trelleborg paying current CRP controller Barclays Private Equity in both cash and by assuming loan-repayments.

Lennart Johansson, president of the Trelleborg Engineered Systems division pointed out that, "CRP has a good earning capacity, and it is our ambition to improve it further. CRP has a good order backlog for 2006 and Trelleborg thinks the market will be strong in coming years, he added. But Johannsson also emphasised the project-related nature of the business, resulting g in "great variation in order bookings" making invoicing between different quarters is very variable.

As well as Skelmersdale, 30 year old CRP has a plant Barrow-in-Furness, UK, and three US plants in Randolph and Canton, Massachusetts, and Houston, Texas, with sales and marketing offices in important offshore areas. At present, Trelleborg has no plans for any relocation or restructuring of the business, which will be integrated within the Engineered Systems division once the purchase is finalized, the spokeswoman said.

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Press release from Trelleborg

Barclays Private Equity sells CRP Group to Trelleborg AltAssets (UK)

Barrow factory in £70m takeover Evening Mail (UK)